Hollywood (Florida) psychiatric hospital charged in huge Medicare fraud sweep

October 5, 2012

Five people affiliated with a private Broward County mental health hospital, including its chief executive officer, were charged Thursday in one of the nation's largest strikes ever against Medicare fraud.

The defendants fraudulently billed Medicare for at least $50 million in mental health services through the Hollywood Pavilion, investigators said, paying bribes and kickbacks to patient brokers, then creating false documents to cover their tracks.

Federal attorneys moved to freeze the assets of Hollywood Pavilion CEO Karen Kallen-Zury, who investigators say actively participated in the scheme that stretched back at least to 2003. Patients never received the services or did not qualify for them, officials said.

Staff answering the phone at Hollywood Pavilion said the administration had no comment. State records show the 50-bed facility is licensed as an adult psychiatric hospital.

The action was part of a multi-agency federal fraud sweep that filed legal actions against 91 individuals, including doctors and nurses, in seven cities nationwide.

The effort, which Attorney General Eric Holder said was one of the largest of its kind, involved $429 million in false billings. Speaking at a news conference in Washington D.C. with other federal officials, Holder said the cases revealed an alarming trend in criminal efforts to steal billions from the government health-care program for seniors and the disabled.

"Today's arrest put criminals on notice that we are cracking down hard on people who want to steal from Medicare," said Health and Human Services Secretary Kathleen Sebelius.

Ltc Professional Consultants Inc. and Professional Home Care Solutions Inc., home health care companies in Miami, also face charges involving $74 million in alleged fraud through billings. Neither company could be reached for comment.

Federal officials said a total of 33 people were named in 15 South Florida cases involving $202 million in questionable Medicare claims for occupational and physical therapy, medical equipment, insulin injections and other services. Several involved pharmacies that recruited and paid physicians to write false prescriptions.

Cities outside South Florida where charges were filed include Baton Rouge, La.; Brooklyn, N.Y.; Chicago; Dallas; Houston, and Los Angeles.

South Florida is a hotbed of suspicious Medicare billing for mental health services, according to a recent federal report. Top executives of Miami-based American Therapeutic Corp, the nation's largest mental-health chain, in June were found guilty of bilking Medicare out of $205 million. And owners of another Miami clinic, Biscayne Milieu Health Center, were convicted of similar charges in August.

Sebelius on Thursday said her agency was using new authority under the Obama administration's health care law to stop future payments to many of the health care providers suspected of fraud.

The Obama administration has expanded the government's pursuit of health-care fraud. Since the inception of a strike force in 2007, more than 1,480 defendants who have collectively falsely billed the Medicare program for more than $4.8 billion have been charged.

The Medicare Fraud Strike Force, responsible for Thursday's indictments, includes the Justice Department, Health and Human Services Department and Federal Bureau of Investigation.

Source: Diane C. Lade, "Hollywood psychiatric hospital charged in huge Medicare fraud sweep," Sun Sentinel, October 4, 2012.